CME Group profit falls 12% as lower fees cut sales

For that group, 270 money managers have registered with CME Group to clear swaps, Chief Executive Officer Phupinder Gill said.

In December, CME Group began offering interest-rate swap futures that convert into cleared swaps if held until delivery. The first chance to take delivery occurred in March, with about 25% of the contracts being converted to cleared swaps, Derek Sammann, senior managing director of financial products and services at CME Group, said on the call.

That was more than the exchange was anticipating, he said.

The swap-futures contracts don’t count toward determining whether users face higher collateral, capital and trading requirements under CFTC rules, CME Group said in February. The regulator requires traders who buy or sell more than $8 billion of swaps annually to face the tougher standards by being designated a dealer or so-called major-swaps participant.

That decision by CME Group has drawn scrutiny from the CFTC, which said in February it was reviewing the contract.

Revenue in the first quarter fell 7.2% to $718.6 million last quarter, from $774.6 million a year ago, the company said. The fees CME Group took in from selling market data and information services fell 29% to $80.9 million in the quarter from $114.2 million a year ago, the company said.

About 12.5 million contracts changed hands per day during the period on CME Group’s markets, which offer futures based on interest rates, equity indexes, commodities and energy products. That was up 1% from the year earlier average of 12.3 million per day, the company said last month.